SBJ Betting: Will MLBPA succeed with sportsbook lawsuit?

The lawsuit that the MLBPA filed this week against sportsbooks that use player photos on their apps had me scouring my sometimes glitchy memory banks -- and then our far more reliable archives -- for a magazine package we delivered three months after PASPA fell in 2018 (you may find it prescient).

In a story detailing the evolution of court rulings related to athlete NIL -- and the publicity rights laws that underpin it -- Proskauer partner John Oram said this:

“I’ve been telling a lot of people that this case is very important, particularly as it relates to gambling. There are all these various technology ventures springing up. And it all really goes to the question of what you can and can’t do without a license. The law seems to really be ever-evolving in this area. And the courts have had a very difficult time in trying to fit sports into the rubric of publicity rights and copyright and our other intellectual property laws. It’s an interesting time for us lawyers, because there are a lot of questions that are not susceptible to easy answers.”

This casewas a suit filed in 2016 by Northern Illinois running back Akeem Daniels and two other players, who alleged that daily fantasy operators FanDuel and DraftKings unlawfully profited from the use of their name and statistics in their games and his image on their websites and apps.

The players lost in U.S. district court, where a judge ruled that Indiana’s right of publicity law exempted “material of newsworthy value,” and that the DFS operators’ use of the players’ NIL fell under that protection. In October 2018, the Indiana Supreme Court ruled that the exemption applied to “online fantasy contests,” supporting the case’s dismissal.

It’s worth noting that the MLBPA was among the unions filing briefs in support of the athletes in that case. And that its cases against DraftKings and FanDuel were filed in Pennsylvania and New York, respectively, where courts may take a more protective view of NIL than did those in Indiana.

Though recent NIL court rulings and the settlements that followed them have swung in the favor of players, those have involved college players and the NCAA rules that kept them from being paid.

This case is about something else entirely -- the determination of how and where NIL protections apply. Not much has changed on that front since Daniels. The legal concept of publicity rights is rooted in sports, tracing back to a 1953 dispute between trading card companies. Since then, it has been applied in cases involving table games, video games and fantasy games.

Turns out Oram and others we spoke to after the fall of PASPA got it right when they predicted sports betting would provide its next forum.

The campaign behind the ballot initiative that will ask Missouri voters to legalize sports betting received a $5 million contribution from DraftKings this week, as ads in support of the measure began to air across the state.

Operating as “Winning for Missouri Education,” the committee has spent $1.2 million on TV ads thus far and committed another $4.7 million on bookings to hold slots leading up to the Nov. 8 election, the Missouri Independent reported.

This week also brought the launch of an opposition campaign, funded through a $4 million contribution from Caesars, which operates three land-based casinos in the state, but appears to have lost its appetite to wage the expensive fight for online market share.  After peaking at 11% of handle share in June of last year in neighboring Kansas, it fell to 4% last month. It’s also at 4% in Illinois.

Missouri has been one of the more confounding states for sports betting proponents; one of the first to introduce legislation when PASPA fell in 2018, and one of the last holdouts as it has chugged through the Midwest. Frustrated by the political maneuvering that kept it stalled at the statehouse, the pro teams moved forward on their threat to lead a ballot initiative, funded by DraftKings and FanDuel.

An Emerson College poll of 850 likely Missouri voters released earlier this week showed 52% supporting the ballot measure, with 25% opposed and 27% undecided.

Sports betting is still not legal in Texas, and you can set the Lone Star State aside for the rest of 2024, since legislators only sit in regular session in odd years.

But that didn’t stop the topic from being brought up from Dallas-area team execs this week at our AXS DRIVE event in Frisco.

For Charlotte Jones, the Cowboys’ co-owner and chief brand officer, getting sports betting legalized in Texas is a key issue she’s spending time on. “We have had a concentrated effort trying to push that forward,” noted Jones, who also sits on the NFL’s sports betting committee. “It's hard when you're talking to politicians. They assume that you want sports betting because you're trying to make money off the bet. That certainly far from the truth.”

For Jones and the Cowboys (and most other teams in pro sports), sports betting helps with fandom. “We saw this bump in avidity and stickiness of our fans when we [ramped up] fantasy football, because everybody wanted to see every game -- not just the team that they rooted for. And you magnify that. It becomes really quite an additive effort. … [Fans] want to follow everything, and they want to stay in and engage to the last second of the game in every game. And to have that kind of interest for our fans across the sport is really significant for us as a league standpoint.”

For Stars President and CEO Brad Albert, sports betting is also one of the biggest issues on his plate. “How gambling is going to play in the state of Texas continues to be a big question mark, and it'll have a great impact on our business if it's legalized,” he said. 

Albert thinks Texas teams will get a much better feel once the new legislative session kicks off in January. 

It appears the Olympics provided little, if any, additional wagering activity in what has been the second-lowest handle month each year in the U.S.

Results from August were up 26% compared to the same month last year in the 20 states that have reported, nearly mirroring the year-over-year increases of June (+29%) and July (+25%) -- an indication that the Olympics had no incremental impact.

Results in the few states that report handle by sport bear that out. And that brings us to this week’s installment of "Fun With Numbers."

In Oregon, Olympic basketball accounted for $3.97 million in handle, up from $69,075 last year. But baseball betting fell $4.6 million, an indication that summer bettors simply shifted their wagers, rather than increasing them. In Maryland, basketball betting rose from $18.3 to $31.2, but it accounted for about the same share of bets as it did last August, ticking up to 8.3% from 7%. Parlay share rose from 28% to 33%, which may have been driven by the Olympics parlays that the leading books promoted on their landing pages. But any gains, again, came at the expense of baseball, which saw its share slip by five points, from 28% to 23%.

In Indiana, “other” accounted for 27% of bets in August, identical to the rate of a year ago. Basketball was 7%, down from 8%. The biggest swing was in football, which went from accounting for 7% of August bets to 11%. Notre Dame opened at Texas A&M this year. Last year, it traveled to Ireland to play Navy.

New Jersey is the only one of the 20 states that have reported thus far that was down compared to last August, falling 4%. The “other” category accounted for 27% of bets in the month, up only slightly from the 25% of the rest of the year.

Regulators in Vermont issued a separate report around the Olympics, as they have for most major events since legalizing at the start of the year. Bettors in Vermont wagered $1.2 million during the 17 days of the games. Because that included five days in July, there’s no way to gauge the percentage of total handle.

But there is a relevant comparison to be found in the last special event report Vermont issued, around the NBA Finals, which the nearby Celtics won in June. Those seven games generated $921,442, or $184,288 per game. That’s nearly triple the $69,457 that the Olympics produced per day. Olympic betting was more in line with the Stanley Cup Final, which generated $81,748 per game in Vermont.

Vermont accounts for about one-tenth of 1% of U.S. wagering, so you can’t hold it up as an indicator. But the special event reports do make for an interesting read.

• Last year, nVenue signed a multiyear deal with NASCAR, testing its predictive analytics tech in a sport with so many variables that change drastically from week to week. With the first year of the deal ending in August, nVenue CEO Kelly Pracht spoke with SBJ's Ethan Joyce about her company's work with NASCAR and the learning process that’s come with the experience -- particularly around microbets.

• BetMGM reported a 108% increase in WNBA betting this season, "with two times as many women engaging in betting on the league," notes Reuters. Six of the top eight most-bet games at BetMGM involved the Fever, and "five times as many prop bets" were placed on Caitlin Clark than the next most-bet player -- Chicago Sky F Angel Reese.

• Penn Entertainment "will not launch its sportsbook app in the Empire State until Week 4 at the earliest, despite indicating that New Yorkers would have ESPN Bet before the start of NFL betting," notes Legal Sports Report. The issue "stems from transitioning the NY sports betting license Penn purchased from WynnBet in February." Penn’s application "will likely be considered at a Sept. 23 meeting of the New York State Gaming Commission, according to a state spokesperson, weeks after Penn finished submitting required paperwork to the regulator in August."